2017-04-08 / News

With Cap Reached for H2B Workers, Straits Area May Feel Impact

By Kevin R. Hess

With a federal cap on temporary foreign workers reached early this year, some local tourist businesses are evaluating whether they will have to open later, reduce services, or change the way they operate. Legislation introduced this month could allow more workers into the country by exempting returning workers from the cap. The long-time exemption was removed last year, and the time period in which to apply was shortened, and these changes were significant in putting stress on the program this year. But on Mackinac Island, the cap is not expected to have a significant impact on two large employers, Grand Hotel and Mission Point Resort.

Businesses in the Straits area rely heavily on the H2B visa program, which allows U.S. employers to bring foreign nationals to the United States to fill temporary, non-agricultural jobs that American workers are not available, or able, to fill. The federal cap for H2B workers is 66,000 for the fiscal year from October 1 to September 30, and this year the cap was reached March 16, two full months earlier than 2016. This means that, other than several small exemptions, no more applications for H2B visas will be accepted by the United States Citizen and Immigration Services (USCIS). Student visas and other programs are also used by some businesses in the area, but the majority rely on the H2B program.

In 2016, employers who hired H2B workers saw changes in the process. Previously, businesses were able to apply for workers 120 days before they needed them. Last year, that time frame was reduced to 90 days. Although businesses had to wait a month later than before, most were able to still get the workers they needed, as the cap for H2B workers was not met until May. The recent non-renewal of a “returning worker exemption” by Congress significantly reduced the number of international workers available for U.S. businesses in fiscal year 2016-2017.

The returning worker exemption allowed workers who had been in the U.S. on an H2B visa from 2012-2015 to return without counting against the cap. This enabled businesses to request the same workers without concern that the cap would be met. There were numerous other benefits to bringing back workers with experience, and with whom business owners had developed a good working relationship.

But now, some businesses may find themselves with a shortage of workers, especially those who have later opening dates, as that determined when they could request the workers. Joe Lieghio, who owns a bevy of restaurants and hotels in Mackinaw City, believes the impact of this cap will be significant.

“We’re taking our foot off the gas,” he said. “We may have to open later than we would like to because we don’t have the workers.”

Mr. Lieghio believes many businesses will not be able to completely fill their need for workers, forcing owners to possibly reduce hours, or forcing other employees to do more than they were hired to do.

“It’s a tragedy for the area,” said Mr. Lieghio. “Twenty years ago, our tourist season was just summer. Now we’ve extended... We depend on the tourism culture.”

He thinks as many as 1,400 foreign nationals work in this area under the H2B visa program.

Mr. Lieghio is already thinking ahead to what he might have to do if he cannot fill his quota of workers. In the hotels, he has looked into outsourcing the front desk and reservations to a call center, acquiring kiosks for check-ins, and automating some of the housekeeping tasks. By using automation, he says, tasks that required 55 people could be done with 12.

“Technology is expensive, and I would much rather hire people to do the jobs, but if we have to go another route, we will,” said Mr. Lieghio.

He admits that his businesses may be in better shape than others, but he is not to the capacity he would like to be.

“We’re short,” said Mr. Lieghio. “We’ve been hiring pretty much everyone who walks in the door. We’ve gotten approval for a lot of workers, but we’re still in a reduced capacity stage.”

Randy and Traci Darrow, owners of Darrow’s Family Restaurant in Mackinaw City, are also concerned.

“The pool (of workers) is so small and the need is so great,” said Mrs. Darrow.

Darrow’s typically uses 12-15 H-2B workers, and many of them have worked with the restaurant since 2000, the first year Darrow’s began using H-2B workers.. Last year, they received all the workers they needed, but did not get all of them until late May. This year, they are unlikely to receive the same number of workers.

“We’ve never ran into this problem before,” said Mrs. Darrow. “Some of the workers we do have will have to work seven days a week, and a few days from open to close. Our H-2B workers are as much family to us as our American workers, and they rely on having the work.”

Mrs. Darrow commented that when she last visited the Web site for H-2B workers, there were 120,000 applications to fill the allotted 33,000 positions. Some speculate that businesses who may have used illegal workers before are now applying for H- 2B workers, increasing the number of applications.

“Sixty to seventy percent of those (applications) were for landscaping positions,” she said.

Despite the concerns, Darrow’s Family Restaurant plans to operate its normal hours, offering breakfast, lunch, and dinner service.

“We’re dedicated to the restaurant,” said Mrs. Darrow. “We want to take care of our workers and our customers.”

Efforts have been made throughout the years to raise the cap, and reduce the stress on businesses in areas like the Straits that rely so heavily on tourism. Jim Clapperton of Michigan Works in St. Ignace says that the issue in the Straits is a microcosm of all that goes on in the bigger areas.

“I’ve been told that in places like Washington and Lansing, the phrase ‘foreign worker’ is a dirty word,” said Mr. Clapperton. “We rely on H2B workers because we don’t have enough locals to fill all of the jobs.”

Mr. Lieghio agrees.

“Some people think this has to do with immigration and cheap labor,” he says. “We pay more for the foreign workers when you consider fees, travel, housing, and the advertising we are required to do when requesting (H2B) workers. We prefer locals, but there aren’t enough. If anyone wants a job, they can find one.”

Mr. Clapperton says that the H2B situation puts a lot of pressure on business owners. He was in the restaurant business for several years and could never fill all of the positions he needed.

“The extended tourism season can cause problems because of a lack of workers,” said Mr. Clapperton. “I was still listing jobs in October of last year because business were short employees. College kids (foreign and local) leave in midsummer and the tourism season is still going on. Business owners need those workers.”

Some businesses have been successful in filling their needs before the cap was reached, or by finding other workers to fill their ranks.

On Mackinac Island, Jennifer King, general manager at Grand Hotel, says they will be fine.

“I don’t believe it will affect us,” said Mrs. King. “We, along with places like Mission Point, prepared accordingly and made sure we started the process as early as we could. It’s not a perfect scenario, but we’re not sounding the alarm here.”

Best Western Harbour Pointe Lakefront in St. Ignace employs around 20 H2B workers. Ronn Farr, manager of the hotel, says they have not been affected.

“We’ve gotten approved for the workers we applied for. It hasn’t been an issue for us,” he said.

One of the options that business owners have is to recruit H2B workers who are already in the country working elsewhere. Since these workers are already approved, they would not count against the cap. Some businesses make trips to areas that employ a lot of H2B workers, such as ski resorts out west, for this very purpose. Businesses have options, but those options are more limited than they have been in years.

Another option businesses have is to use workers on the J- 1 visa program. The J-1 visa, or the Exchange Visitor Program (EVP), provides opportunities for non-immigrant individuals, often university students, to participate in work-study based exchange visitor programs.

“J-1’s have no cost to the employer, but there is a lot more turnover,” said Mr. Farr. “Our H- 2B’s have been with us since 2000 and are an integral part to our customer service.”

The impact on the Straits area will be unknown until the tourist season begins to take shape.

“It’s going to be an interesting season,” said Mr.

Lieghio.

There is some hope that the returning worker exemption will be reinstated.

State Senator Wayne Schmidt and Representative Lee Chatfield expressed their concerns about the program to U.S. Congressman Jack Bergman and, on March 20, he introduced H.R. 1627, the “Small Business Assistance Act of 2017” to amend the Immigration and Nationality Act to reinstate the returning worker exemption for H-2B visas for fiscal year 2017, retroactive to October 1, 2016. The bill was referred to the House Committee on the Judiciary. If it is passed, international workers who were in the United States on an H2B visa in 2014, 2015, or 2016 would not count against the cap.

No action has been taken at this time.

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